Filing taxes is a task that many people dread, often putting it off until the last minute. However, there are many benefits to filing taxes early. In this article, we’ll discuss some of the advantages of filing your taxes early.
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Get your refund sooner
If you’re expecting a refund, one of the main benefits of filing your taxes early is that you’ll get your money sooner. The IRS typically processes tax returns in the order that they’re received, so the earlier you file, the earlier you’ll receive your refund. This can be especially helpful if you’re counting on the money to pay bills or make a large purchase.
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Avoid late filing penalties
If you owe taxes, filing your return early can help you avoid late filing penalties. The penalty for filing your taxes late is 5% of the unpaid tax for each month that your return is late, up to a maximum of 25%. By filing early, you’ll ensure that your return is submitted on time and avoid these penalties.
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Reduce stress
Filing taxes can be a stressful experience, especially if you wait until the last minute. By filing early, you can reduce the stress of rushing to get your return completed and submitted before the deadline. You’ll have more time to review your return for accuracy and make any necessary corrections, which can give you peace of mind.
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Identify errors or issues
When you file your taxes early, you’ll have more time to review your return for errors or issues. This can be especially helpful if you’re claiming deductions or credits that require additional documentation, such as charitable donations or business expenses. By identifying any errors or issues early, you can avoid potential problems with the IRS down the line.
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Reduce the risk of identity theft
Tax-related identity theft is a growing problem in the United States, with thieves using stolen social security numbers to file fraudulent tax returns and claim refunds. By filing your taxes early, you can reduce the risk of someone else filing a return in your name. Once you’ve filed your return, any subsequent attempts to file using your social security number will be flagged by the IRS as suspicious.
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Plan for future taxes
By filing your taxes early, you’ll have a better understanding of your tax situation for the upcoming year. You can use this information to adjust your withholdings or estimated tax payments, which can help you avoid owing taxes or receiving a large refund in the future.
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Receive assistance if needed
If you file your taxes early and discover that you need assistance or have questions, you’ll have more time to seek help from a tax professional. This can be especially helpful if you’re self-employed or have complex tax situations that require additional expertise.
In conclusion, there are many benefits to filing your taxes early, including getting your refund sooner, avoiding late filing penalties, reducing stress, identifying errors or issues, reducing the risk of identity theft, planning for future taxes, and receiving assistance if needed. By taking the time to file your taxes early, you can enjoy these benefits and ensure that your taxes are filed accurately and on time.